Bargain sites face endgame

MYER chief Bernie Brookes says online bargain sites, such as Catch of the Day, GraysOnline and DealsDirect, have ''had their moment in the sun''.

And he says Australia's traditional retailers will start to dominate online as they get ''fair dinkum'' about the web and integrate it with their stores as an omnichannel offering.

Mr Brookes said these ''flash sites'' all faced the same problem in terms of consistent availability of product and attempt to establish the brand trust of traditional retailers.

''They've been there when there has been no effective competition,'' Mr Brookes said. ''If we produce a list in three years' time of the top internet sellers in Australia, it will be dominated by the Myers, the David Joneses, the Kmarts, the existing bricks-and-mortar retailers. That's exactly what's happened in the US and UK.''

One critical advantage for traditional retailers was the geographic coverage of their stores. Once this was integrated with their digital service as an omnichannel offering, it would be hard for pure online players to compete with the convenience and service, Mr Brookes said.

But he admitted that global price harmonisation - to ensure local prices were competitive with what overseas sellers can offer - was one of the last pieces of the puzzle needed to make all this work.

He said surveys of in-store customers indicated that they rate convenience, fashion/style, service and price, in that order, but it was a different story for online.

''When we survey our customers online, price is No. 1,'' he said.

Mr Brookes said 20 per cent of the company's range was house brands and these were unaffected by price harmonisation. Another 40 to 45 per cent of Myer sales were globally price competitive.

''However, we've probably got 20 to 30 per cent of the range which is not competitive on a world scale,'' he said, naming cosmetic companies and men's apparel as two of the main culprits.

The story Bargain sites face endgame first appeared on The Sydney Morning Herald.

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